Boston Federal Reserve Bank Chairman Collins (Susan Collins) said on Friday (18) that there is little evidence that inflationary pressures are weakening and that the Federal Reserve (Fed) may need to raise interest rates by another 3 meters to try to control inflation.
The Federal Reserve has raised the federal funds rate 6 times this year, including 3 yards 4 times in a row. Fed Chairman Jerome Powell and some officials have indicated that the Fed may slow the pace of rate hikes. interest rate in December to avoid excessive tightening risks.
However, Collins, one of the voting members of this year’s Federal Open Market Committee (FOMC), said on Friday: “Restoring price stability remains a top priority and the Fed clearly has more work to do, than it should require further hikes in the federal funds rate. Then keep rates at a tight enough level for a period of time.”
“The Fed is at a stage where all possible hikes are on the table until we decide the policy is tight enough, and a three-yard hike is still on the table, and I think it’s important to lift that as well,” Collins he said…”.
US producer price index (PPI) data also cooled in October, following a slowdown in the US consumer price index (CPI) in October, but Collins sees no clear evidence and significant that headline inflation is easing.
“We are starting to see some hopeful signs, although we certainly don’t see clear and consistent evidence that the labor market is cooling down and that prices for services are still very high,” he said.
Hawkish Fed officials have taken turns stressing the prospect of rate hikes in recent days, including Bullard and others who have reiterated that the US central bank cannot repeat its policy mistakes of the 1970s.
Federal Reserve hawk James Bullard, chairman of the Federal Reserve Bank of St. Louis, said Thursday that the current interest rate hike has not yet reached a level that could prove to be tight enough, suggesting that the interest rate reference must rise to 5%-7%% to curb inflation.
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said it’s hard to know how far the Fed should raise interest rates, but it shouldn’t stop until inflation has peaked.
Collins added on Friday that there will be new data coming out ahead of the December FOMC meeting, which will affect his view on interest rate hikes, while the Fed’s September final rate forecast (4.6%) is within a reasonable range.
